Solomon Lew: Labor must immediately pass tax cuts

Solomon Lew has taken a swipe at the ALP for failing to immediately pass the Morrison government’s tax reform package.

Businessman Solomon Lew and his wife Roza. Picture: Sean Davey.

Solomon Lew has taken a swipe at the Federal Opposition for refusing to heed the results of the recent election and failing to immediately pass the Morrison government’s tax reform package.

The retail billionaire also warned irresponsible political games are threatening the health of the economy, households and the $320 billion retail sector.

Mr Lew said the federal election was over, and re-running the failed campaign slogans that were rejected by the Australian electorate was the last thing the economy needed.

Delaying the tax reform legislation would only serve to further erode consumer confidence and weaken the national economy.

In a scathing statement on the refusal of the ALP to agree to pass key tax legislation that would trigger tax cuts for as many as 10 million workers — many of which would be spending their fatter wages on clothing and other discretionary goods — Mr Lew said the state of affairs was “extraordinarily frustrating” for the business community.

“The federal election is over, and it is now time to implement the key policy the government took to the people, and not re-run campaign arguments which the election result emphatically resolved.”

Mr Lew, who is chairman and the biggest shareholder in one of Australia’s biggest retailers, Premier Investments, which owns fashion brands such as Just Jeans, Portmans, Smiggle and Peter Alexander, said it was “irresponsible to play political games with the prosperity of the country.’’

“It is imperative for business and consumer confidence that the federal parliament act in the national interest to urgently pass the Government’s tax legislation package,’’ Mr Lew said in a statement this morning.

“It is extraordinarily frustrating for the business community to observe the legislation being treated as yet another display of partisan political point scoring. This serves only to demonstrate a clear disconnect between the urgent needs of the economy and Canberra’s political games.

“Australia’s retail sector employs almost 1.3 million people. As the chairman of Australia’s largest listed discretionary retailer, I am in our stores at every opportunity, talking with our team and our customers. I can see that confidence is low. You only need to look at the factors that are impacting households to understand their nervousness — declining property values and rising costs of living, particularly energy bills which are only going to get larger. Poor confidence leads to weak spending, and this is having an impact on economic activity and growth.”

Prime Minister Scott Morrison went into the May election pledging $158 billion in tax cuts but with the ALP refusing now to support the legislation the much needed tax cuts could be in danger of stalling, depriving the economy of an injection of spending money just at a time when key economic data shows a slowing economy and in particular an poorly retail sector.

Both Prime Minister Morrison and Treasurer Josh Frydenberg have been pouring pressure on the ALP to pass its tax legislation when the parliament resumes next month, as the ALP digs in and puts in jeopardy a first round of tax relief for millions of lower paid and middle income workers.

Latest data from the Australian Bureau of Statistics has shown a slowing retail sector, with sales at the stores slowing and big national chains such as Target and Kmart posting earnings warnings and other retail chains facing similar slides in their profits.

“Retail is at the pointy end of low consumer confidence and will benefit from the legislation being passed,’’ Mr Lew said.

“This is not merely self-interest from a shareholder perspective (a position that all superannuation fund members share) but also speaks to the fact that the retail industry is Australia’s largest employer. Tax cut dollars in the hands of consumers support jobs.

“Business and consumer confidence is underpinned by a strong economy and sound public policies to provide sufficient judgment of certainty for investment and spending. For Australians, a responsible Opposition is as important as a responsible Government.

“Enough point scoring, talking points and seeking side deals. The economy needs stimulus measures now and legislation which provides certainty for tax cuts now and in future years is a critical and welcome measure.

“I urge the Federal Parliament to set aside partisanship and support the Government’s tax package without delay for the benefit of the nation and the broad economy.”

In the lead up to this year’s election Mr Lew also savaged the ALP for its policy to strip pensioners and retirees of franking credits warning that the Labor Party would face a backlash over its “unfair” policy that would touch every member of the workforce as well as rattle the value of shares held in Australia’s $2.7 trillion superannuation system.

“It is very unfair, people have bought these shares in companies for the long term, they are in their super funds and obviously we are watching the political landscape to see where this is heading.”

“I think there will be a big backlash and you may see the Labor Party back down on this particular item.’’